Correction: Vatican-Christmas Shopping story

Updated at: 12/28/2012 8:37 AM
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(AP) VATICAN CITY - In a story Dec. 23 about the Vatican’s tax-free department store, The Associated Press erroneously reported that online cigar retailer http://www.bestcigarprices.com sells Cuban Montecristo No. 3 cigars. The company sells Montecristos made in the Dominican Republic.

VATICAN CITY (AP) _ Anyone left on your Christmas list just aching for a 65-inch Samsung 3D flat-screen television? Just your luck. The Vatican’s duty-free department store has one on sale for (EURO)2,899 ($3,840) _ a nifty savings over the (EURO)3,799 ($5,032) it costs at Italy’s main electronics chain Euronics.

Or how about some new luggage for the holidays? The Vatican shop stocks a variety of Samsonite Cordoba Duo carry-ons for (EURO)123, a nice markdown from the (EURO)135 on the Samsonite website. But if a last-minute shopping splurge is in order, the Vatican can also oblige: Take this leather-bound travelling trunk from Florence’s "The Bridge" leatherworks, with its five drawers, plaid interior, six wooden hangars and shiny brass buckles.

At (EURO)5,900, it comes with a matching leather golf club bag, just what every monsignor needs under his Christmas tree.

There’s a little-known open secret in the Vatican gardens, a few paces behind St. Peter’s Basilica and tucked inside the Vatican’s old train station: a sprawling, three-story tax-free department store that rivals any airport duty free or military PX, stocking everything from Church’s custom grade shoes ((EURO)483 a pair) to Baume et Mercier watches (ladies (EURO)1,585, men’s Capeland (EURO)5,000).

There’s a hitch, however. It’s not open to the public, only to Vatican citizens, employees and their dependents, diplomats accredited to the Holy See and (unofficially) their lucky friends who, after stocking up on holiday must-haves, proceed to the checkout with their Vatican connection and the ID card that entitles them to shop there.

To be sure, Rome is no stranger to tax-free shopping. Many embassies, nearby military bases and the U.N. food agencies have commissaries for their employees, where imports of everything from American ice cream to French wine can be had minus the 21 percent sales tax included in list prices in Italy.

The Vatican has that and more, given that it’s its own sovereign state _ the world’s smallest _ operating in central Rome. At 44 hectares (110 acres), the Vatican city state is the physical home of the Holy See: the pope and governing structure and administration of the Catholic Church.

The Vatican Museums, home of Sistine Chapel, are the main profit-making enterprise of the Vatican city state, bringing in (EURO)91.3 million in revenue last year alone. But other smaller entrepreneurial endeavors boost the Vatican’s coffers as well, including the department store, the tax-free gas station, the stamp and coin office, the Vatican pharmacy and its supermarket.

And in these days of austerity, their profits and bottom line are ever more important to the Vatican.

The Vatican is entitled to run such tax-free enterprises inside its walls based on the Lateran Treaty, the 1929 pact that regularized and regulates the Vatican’s relations with Italy. But those regulations also limit the Vatican’s customer base, lest all of Rome descend on the supermarket to stock up on Gordon’s Gin ((EURO)8.50 a liter compared to the (EURO)15 it can run in nearby liquor stores) or Montecristo No. 3 cigars (box of 25 (EURO)84 ($110.95) compared to $164.95 on http://www.bestcigarprices.com).

About 4,700 people are employed by the Holy See and the Vatican city state; the Vatican’s diplomatic corps _ the Holy See has relations with some 175 countries _ adds another chunk to the customer base.

Few people outside Rome know the department store exists _ there’s no evidence of it on any Vatican website, no photos of its wares, no advertising outside the Vatican walls. Those who do know it exists seem to want to pretend it doesn’t since the high-end luxury items on sale aren’t necessarily in tune with either the sobriety or the salaries of the Vatican rank-and-file.

In fact, on a recent Thursday morning, nary a collar nor religious habit was in sight as ordinary lay folk milled around the spacious store during December’s "extraordinary opening hours" _ extended to accommodate bargain-hunting Christmas shoppers who were rewarded with a wine tasting in the central atrium and piles of Brooks Brothers non-iron shirts and Burberry backpacks to choose from.

"More than the prices, it’s the material," said Luciano, a bulky Roman, who refused to give his last name as he shopped for an overcoat with his wife and an obliging Vatican friend waiting at checkout. "This one I don’t like _ I look like a priest," he muttered as he put the navy blue trench coat back on a hangar.

Cardinal Edmund Szoka, the American who sought to bring some order into the Vatican’s finances as head of the Vatican city state, is credited with having made the department store what it is today, moving it into the Vatican’s underused train station, a miniature version of Washington’s Union station with a sweeping double staircase and glass-front window that frames the dome of St. Peter’s a few meters (yards) away.

Szoka said he moved it from the basement of the Vatican government building to the train station for more space, since the station wasn’t used anymore for passengers and provided the perfect, airy open space that a shop of its kind would require.

"Our principal motivation in changing the train station building into a department store was mainly for the convenience of our employees, as well as for those who could come into the Vatican and shop there," he said in an email from his home in Michigan. "Naturally, we expected a profit, but that was not the primary motivation."

Szoka retired in 2006, well before the global economic crisis hit. The current leadership of the "Governorato" as the city state administration is called, recently asked all department heads to come up with cost-saving or profit-making initiatives to help the Vatican get through the tough times.

"Any good administrator wants to save what can be saved," said Monsignor Giuseppe Sciacca, the governorato’s No. 2. "It seems obvious, necessary."

The Philatelic and Numismatic Office, for example, recently started selling a special limited-edition stamp to help pay for the (EURO)14 million restoration of the Bernini colonnade in St. Peter’s Square after corporate sponsorship dried up amid the recession.

Vatican Radio announced in July it would be saving "hundreds of thousands of euros" in energy costs by stopping short -and -medium-wave broadcasts to Europe and the Americas, using other technologies instead.

Perhaps even more than the department store, the Vatican supermarket is a much-sought after perk for Vatican employees, and a boost to the Vatican’s bottom line. And at Christmastime, it is as jammed as the department store, with lines snaking through the store and cars taking up valuable parking spaces inside Vatican City as shoppers pile their carts high with panettone, the traditional Italian Christmas cake which is the de rigueur gift for Italian holiday parties. Panettone can run (EURO)25 a pop at Roman bakeries; in the Vatican supermarket, a high-end brand runs almost half that.

"The Nutella is just better here," said Maria Grazia Mancini, a Rome municipal worker who was doing a major pre-Christmas shop with her father, a Vatican employee. "The products here are for export _ the same brands but for export, so it’s better quality."

While Sciacca is only too pleased to see the Vatican saving money where it can be saved and making it where it can be made, he was adamant that there are no plans to expand the customer base of the Vatican’s little-known discount stores. Accords with Italy don’t allow it.

"We shouldn’t. And we can’t," he said.

He spoke on the sidelines of the presentation of the Vatican’s 2012 nativity scene, being unveiled Monday night and donated for the first time. The Vatican happily accepted the donated creche from the Italian region of Basilicata after its (EURO)550,000 Christmas setup in 2009 was exposed earlier this year during the scandal over leaked Vatican documents.